Thursday, 15 March 2012

Arbitration (Is Not the Same as) Courts of Conciliation

In my first year of law school at the University of Texas, we had a class called "Introduction to the Study of Law." My section was taught by Professor Leon Lebowitz, one of the nicest profs at the law school, and a really good Business Associations, Securities Regs professor. Intro, at least I remember it, was known best for its endless discussions about the "forms of actions" which of course were purely historical relics even at the time. (For some reason trespass de bona asportatis sticks in my mind, how scary is that?)

I felt I was transported back to the fall of 1972 as I read Stuck in Arbitration, an op-ed piece by Professor Amalia D. Kessler of Stanford University that appeared in last week's New York Times. Professor Kessler wrote about a failed attempt in the United States in the mid-19th century to create "conciliation courts," which she described as:

widely adopted throughout Europe and its colonies during the late 18th and early 19th centuries, these were institutions composed of respected community leaders seeking to persuade disputants to accept an equitable compromise in secret, lawyer-free proceedings and without regard to the formal rule of law.

When she described this as a "nearly forgotten debate" I think she was being far too kind, as I doubt that there is almost anyone who is familiar with it. (Although I wouldn't have been surprised if Professor Lebowitz knew!)

What is a stretch though is her comparison of Courts of Conciliation to modern day arbitration and her plea for Congress to pass The Arbitration Fairness Act. Reading between the lines, I am not sure that she thinks there is really an apt comparison, but I suspect more a clever way to affirm her support, for what even she concedes would not "be a panacea."

The Arbitration Fairness Act addresses arbitrations in both consumer and employment relationships, a combination that I have always felt was inappropriate as the two merit individual attention.

For those who believe that a serious look at how we resolve employment disputes should include arbitration, which means that it must be mandatory, it is good news that it will not pass in this particular Congress. The bad news is that the current partisan divide makes it unlikely we will ever have a serious review and compromise on that issue.

Like so many issues, it will be an all or nothing outcome, and unfortunately, such outcomes regardless how much one side may feel vindicated depending on which view prevails at any given time, are almost never the optimal solution.

Update (3.19.12): I was not the only one to take note of Prof. Kessler's recommendation. Three letters to the editor sounded a similar point. One of the most notable is Professor Theodore St. Antoine, who was a long time academic and very well respected, and unless I have missed something along the way, not some one who would be accused of "speaking the management line." Resolving Disputes Through Arbitration.

Professor St. Antoine I think has it right:

The solution is not the outright prohibition of all pre-dispute agreements to arbitrate, as proposed by the ill-advised Arbitration Fairness Act. It is legislation that would guarantee due process in arbitration, including neutral arbitrators, and ensure that grievants have a voice in their selection and all the remedies that could have been obtained in court.

Note the key phrase, "pre-dispute agreements." Any legislative action that bars pre-dispute agreements as a condition of employment, is for all practical purposes a ban on arbitration in the employment law setting. And since that is what the Arbitration Fairness Act does, the title itself is quiet misleading.